I am sure everyone is familiar with the concept of the triple bottom line (economic success, ecological succes, social responsibility success), so I will not elaborate on the three components.
As I write this, the UN climate change meeting in Copenhagen has completed, with an outcome that many would call disappointing. One possible reason for the result was that governments had trouble reconciling their environmental national interest with their economic national interest. And … the meeting required simultaneous cooperation of over 150 nations. Sounds difficult, doesn’t it?
I am not going to use this newsletter to say if or how we should manage carbon emissions. Instead, because there is some global momentum for something to happen, I instead want to ask the question …
Is it possible for industry to show governments how to reduce carbon emissions?
History is filled with examples where industry showed government how it could be done. The current practice with ensuring diamonds are not “blood diamonds” is one example. Governments were pivotal in creating the Kimberley Process as a way to manage the sale of diamonds that were being used to fund civil wars against legitimate governments. Industry (the World Diamond Council) then created a system of warranties to meet these requirements. It gives companies and nations some freedom on how to meet these requirements. For example, every diamond mined in the Northwest Territories of Canada is laser inscribed and entered into a database. They are then able to charge a premium because each stone is extremely unique, and can be verified with complete certainty of how it was collected – right back to the mine.
So how can industry show government what to do? The current corporate culture of using the triple bottom line could be one mechanism. For example, one very simple way is to report the grams of carbon produced to put an item on the shelf. Consider a can of paint. If one company says “we only produced x units of carbon in delivering this can of paint to your store”, they could use that as a marketing tool. People could then decide to use the environmentally responsible paint (open and transparent, data available) or the potentially environmentally unresponsible paint (no information … “they must have something to hide”). This will then cause other suppliers of paint to label their products – and make a big deal if they are lower.
This starts the process. One company gets a competitive advantage, others catch up. They determine how much carbon they produce, and if lower, can announce they are more environmentally friendly. And the naturally competitive process of the market can drive things to a natural conclusion.
At this point, governments can enter the situation. They can then work to ensure the manner of reporting carbon is uniform and consistent, so the consumer can make an easy comparison.
What do we get?
A benchmark
A reduction – although the amount of reduction will not be known, but the process will be started.
A process in place that is working
It is also at this point that governments can start to do other things with carbon, because they have the information and it is managed. Some countries that were very passionate at Copenhagen (such as the island nations) could introduce a “carbon tariff”. By itself, one nation probably could not make this work, but a collective effort of island nations in a region (such as the Pacific Island nations, or the Caribbean Island nations) might have enough collective size to cause something to happen.
If we learned one thing from Copenhagen, it is that governments are not willing to fund carbon management with taxes. Even though the amount of money in the world is finite, using taxes to collect the money is not desired. Another mechanism of collecting the money for carbon management is needed, and it is very possible for industry to cause the change to begin.